NOTE: If you wish to join this meeting by conference call, please contact the Commission at 605- 773-3201 by 5:00 p.m. on July 22, 1998.

NOTE: Notice is further given to persons with disabilities that this Commission meeting is being held in a physically accessible place. If you have special needs, please notify the Commission and we will make all necessary arrangements.

AGENDA OF THE COMMISSION MEETING

Administration

1. Approval Of The Minutes Of The Commission Meetings Held On June 30 and July 1, 1998. (Staff: Shirleen Fugitt.)

On January 8, 1998, the Public Utilities Commission (Commission) received an application from the City of Vermillion, SD, (City) requesting that the Commission set a time for a hearing on a Motion for Order to Show Cause. City also filed an Affidavit in Support of Order to Show Cause, Order to Show Cause, and Memorandum of Authorities in Support of Applicant's Motion to Show Cause. The affidavit stated that on November 20, 1995, the City annexed a tract of real property that Clay-Union Electric Cooperative (Clay-Union) currently has service rights to and has installed electrical facilities that serve one customer therein; that on March 11, 1996, the City annexed a tract of real property that Clay-Union currently has service rights to and has installed underground electric facilities that serve three customers therein; and, that on April 12, 1996, the City annexed a tract of real property that Clay-Union currently has service rights to and has installed electrical facilities along the East and South sides thereof but serves no consumers therein. On October 21, 1996, the City adopted a resolution to exercise its privilege to purchase Clay-Union's utility properties and services rights within each of the three above-mentioned annexed areas. On October 30, 1996, City served its written offer to purchase Clay-Union's utility properties on Clay-Union. On May 29, 1997, Clay-Union acknowledged City's offer and informed City that it would not consent to the conditions set forth in the October 30, 1996, Notice of Intent. City alleges that since October 30, 1996, Clay-Union has refused to proceed to act in any manner directed to determining the amount to which it is entitled pursuant to SDCL 49-34A-50. On July 2, 1998, the Commission received the Stipulation and Agreement.

TODAY, should the Commission approve the Stipulation and Agreement and close this docket?

On January 14, 1998, Paul Muth, Mitchell, SD, filed a complaint against Northwestern Public Service (NWPS) regarding an accounting of costs. The complaint states: "NWPS was at the Palace Mall in Mitchell at 3:50pm on January 8, 1998. They were using a utility pickup with a bucket on it to work on the parking lot lights. We want to see the accounting in writing to show what they charged the private side of their business. They were actually there all day we were told later. Just show us the accounting procedure in writing - nothing more, nothing less." The complainant requests that actual accounting of cost in the books for the utility versus the private venture side of their business are being allocated correctly.

TODAY, does the Commission find probable cause of an unlawful or unreasonable act, rate, practice or omission to go forward with this complaint and serve it upon the Respondent?

On February 25, 1998, Kevin J. McKee, Deadwood, South Dakota, filed a complaint against Black Hills Power & Light Company regarding receiving electrical service. The complaint states: "My property lies within BHPL territory, he nearest power is in e Electric territory. I've talked to both power companies and a territorial trade is unlikely. I've received estimates from both companies and to receive power from BHPL would cost a minimum of $11,880.00 and that is if I can obtain a right of way over a neighbor's property and if it were all overhead. On the other hand e Electric is approximately 1/4 mile from my property. It would only cost $3,960.00 to receive power from them...." Mr. McKee is requesting to have the property released by BHPL and to be served by e Electric.

TODAY, does the Commission find probable cause of an unlawful or unreasonable act, rate, practice or omission to go forward with this complaint and serve it upon the Respondent?

On April 1, 1998, Black Hills Power and Light Company filed its 1998 Economic Development Plan and its 1997 Economic Development Annual Report. The filing has a budget of $116,000 to be used in the various economic development programs for 1998.

TODAY, shall the Commission approve the 1998 plan and the 1997 annual report?

On May 19, 1998, the Commission received a joint request for electric service territory exception from Sioux Valley - Southwestern Electric Cooperative and Northern States Power Company. This agreement between the two parties seeks an exception to the existing service territories. This agreement will allow NSP to provide electric service to a residence located at 4500 East Oakwood Place, Sioux Falls, SD. This service is located within the SVSW assigned service territory, however, the companies feel the consumer's interests will be better served with service from NSP. The Commission also has a letter from the resident at this location, Steven M. Larson, agreeing to the change.

On May 26, 1998, the Commission received a request from Turner-Hutchinson Electric Cooperative, Inc. (THEC) for approval of an Exception to Service on Assigned Areas signed by both THEC and Lincoln-

Union Electric Company (LUEC). Under the proposed agreement, THEC consents that LUEC may extend facilities into THEC's territory to provide electric service to the trailer house owned by Mrs. Lorrie Dunkelberger of Hurley, SD.

TODAY, shall the Commission approve the Exception to Service on Assigned Areas between THEC and LUEC?

On June 26, 1998, the city of Watertown, SD, and Codington-Clark Electric Cooperative, Inc. filed an agreement to modify assigned service area. The filing is a result of four annexations to the City of Watertown resulting in boundary changes between the parties.

On June 22, 1998, Judy Mathison, Sioux Falls, SD, filed a complaint with the Commission against Northern States Power company regarding disconnection. The complainant states that her electricity was disconnected, without notice, because her daughter stayed with her while making other living arrangements. The daughter and husband owe $428.08 at a previous address. The complainant is seeking the following relief: No reconnect charges. With knowledge that Troy Johnson is making payments for their old bill, allow Querida Johnson electric service at her new address with no deposit. Reimbursement of $100 to cover spoiled food and having to eat out. Cover legal fees charged. No less than $500 for the anguish and distress caused.

TODAY, does the Commission find probable cause of an unlawful or unreasonable act, rate, practice or omission to go forward with this complaint and serve it upon the Respondent?

On May 5, 1998, the Commission received a complaint from Duane Muxen, Doland, South Dakota, against People's Natural Gas regarding sales tax exemption. The complainant explains that he has filed the certificate of [tax] exemption and has a letter from the Department of Revenue indicating that all requirements were met to qualify for sales tax exemption. The company has indicated that a separate meter is required. The complainant is asking for sales tax exemption.

TODAY, does the Commission find probable cause of an unlawful or unreasonable act, rate, practice or omission to go forward with this complaint and serve it upon the Respondent?

On June 18, 1998, MidAmerican Energy Company filed for approval of waiver of refund plan relating to Kansas ad valorem tax refunds received from Northern Natural Gas Company. To date MidAmerican has received $4,450,770.55 in total Kansas ad valorem tax refunds from Northern Natural Gas. These refunds are being made pursuant to the FERC's Order in Docket Nos. RP97-369-000, et al. MidAmerican respectfully requests the Commission to permit retention of the refund amount received from Northern Natural Gas Company until such time as MidAmerican determines that the amount received constitutes a final refund. At such time, MidAmerican will file a refund plan and calculate accrued interest on the refund amounts at the rate of 9.429%. On June 30, 1998, the Commission considered this application and directed MidAmerican to file a specific refund plan. On July 9, 1998, MidAmerican filed a further request that the refund be retained by MidAmerican until MidAmerican determines the refund final or alternatively for one year at which time they will update the plan.

TODAY, shall the Commission allow MidAmerican to defer the refund?

Telecommunications

1. TC96-153 IN THE MATTER OF THE INVESTIGATION OF LOCAL COMPETITION ISSUES. (Staff Attorneys: Camron Hoseck and Karen Cremer.)

On June 24, 1996, the Commission considered a request from Commissioner Schoenfelder that the Commission open a docket concerning local competition issues. The docket would investigate what rules or policies should be implemented by the Commission to govern local competition issues, such as interconnection, resale, and the unbundling of network elements. On August 7, 1996, the Commission issued its Order opening a docket in this matter. On August 9, 1996, the Commission received the FCC's rules on local competition and interconnection. Following its review of these rules, Staff suggested that the Commission discuss various issues raised by the rules with the affected parties regarding, among other things, how any future TELRIC study should be conducted and a discussion of the default proxies. A ad hoc meeting of September 19, 1996, the Commission voted to open a docket to establish prices for U S WEST's network elements and interconnection and to establish the wholesale rates for U S WEST's retail services. The Commission further voted to rely upon the proxies contained in 47 C.F.R. § 51.513 and to establish interim wholesale rates for retail services pursuant to 47 C.F.R. § 51.611.

Subsequently, the Commission appealed the aforementioned rules and requested a stay of those rules from the Eighth Circuit Court of Appeals. Also related to this matter is the Commission's Final Order in Dockets TC96-038, TC96-050, TC96-054 TC96-083, TC96-087, TC96-088, TC96-099, TC96-163 and TC96-175. Therein the Commission concluded that it would decide the issue of how local exchange providers will be regulated pursuant to state and federal law and it would consider slamming restrictions, both within this docket. In its Order dated November 25, 1996, the Commission rescinded its earlier, September 19, 1996, verbal order after considering the implications of the Eighth Circuit stay and appeal. The Commission subsequently transmitted notice of a December 30, 1996, intervention deadline in this docket. The Commission has granted intervention to MCI Telecommunications Corporation (MCI), Dakota Cooperative Telecommunications, Inc. (DCT), and its subsidiaries, Dakota Telecom, Inc. (DTI) and Dakota Telecommunications Systems, Inc. (DTS), PAM Communications (PAM), McLeod Telemanagement Inc., AT&T Communications, Midco Communications, The South Dakota Independent Telephone Coalition, FirsTel, Inc., and U S WEST Communications. A hearing in this matter was held January 23, 1997.

On September 16, 1997, United Services Telephone, LLC filed for a Certificate of Authority to operate as a telecommunications company within the state of South Dakota. "UST proposes to offer outbound message telecommunications service and inbound Toll-Free (800/888) services to its customers through switched and dedicated access facilities provided by its underlying carriers....Applicant proposes to offer South Dakota intrastate long distance services in conjunction with interstate services."

TODAY, shall the Commission grant a Certificate of Authority to United Services Telephone, LLC?

On September 24, 1997, Sterling International Funding, Inc. filed for a Certificate of Authority to provide local exchange services in South Dakota. "Petitioner, Sterling International Funding, d/b/a ReconexTM is affiliated with Ameritel Corporation, a residential dial tone service provider which has been operating since 1992. As the leader in the prepaid dial tone industry, Applicant and its affiliate, have provided high quality local exchange service to thousands of customers. Reconex is an alternative telephone company primarily furnishing prepaid local dial tone service to individuals who have had their telephone disconnected, have voluntarily left their local exchange provider, or for money management reasons prefer to address their local calling needs in a prepaid fashion at a set fee, which represents their bottom line cost. Applicant proposes to offer service in the area and exchanges currently being served by the existing incumbent local exchange carrier, U S WEST." On June 4, 1998, the commission denied the application. On July 1, 1998, Reconex applied for a rehearing of the denial.

TODAY, shall the Commission grant a Rehearing of the Order Denying Certificate of Authority to Reconex?

On October 29, 1997, Ben Hofer, Carpenter, SD filed a complaint against U S WEST Communications, Inc. regarding updating lines. "We live in southern Spink County on the northern end of the Huron area phone line served by U S WEST. We experience frequent phone service outages. These most often happen when there is a weather change. The servicemen tell us that wind drives in snow and dirt in the boxes, or a drop of moisture which shorts out circuits. Mice also have caused outages by being in the boxes. Also, the servicemen tell us the relay equipment is of the oldest style, seldom found in use any more. Our internet connections are slow. The majority (33 of 50 connections) are in the 12,000 to 16,800 bps range. The low capacity of the phone lines may also relate to line noise and weak phone signals we experience. There are no more phone lines available for our use to our farm. Today's agri-business operation is relying increasingly on rapid communication to do business. On one phone line we have: phone, fax and internet, a family residence, a farm/ranch that produces a half million dollars of ag. products annually, and a farm/ranch Bed & Breakfast/farm vacation business (possibility farm)." I ask that the PUC grant the following relief: "PUC should mandate that U S WEST update the lines in our area so that we can operate our ag business, tourism business and personal business in an expedient manner. We need two more lines, which are presently unavailable, to our farm." On April 28, 1998, the Commission entered an order requiring U S WEST to install a digital line carrier system by "mid-July" to serve the Ben Hofer farm. On July 16, 1998, the Commission received a request from U S WEST to extend the completion date until October 31, 1998.

On December 24, 1997, Jerome Jacobs filed a complaint against U S WEST Communications, Inc. regarding having an extra line installed. The Complainant states that he "would like to have an extra line for present and future development. U S WEST said I would have to pay for this line and service at a very high cost." Mr. Jacobs is requesting that U S WEST pay for this installation.

TODAY, does the Commission find probable cause of an unlawful or unreasonable act, rate, practice or omission to go forward with this complaint and serve it upon Respondent?

On May 18, 1998, the Commission received an application by Black Hills Fiber Systems, Inc. for a Certificate of Authority to operate as a telecommunications company within the state of South Dakota. Black Hills Fiber Systems, Inc. intends to provide a broad range of communication services consistent with the capabilities of a fiber optic network and the needs of its customers. Black Hills Fiber Systems, Inc. intends to construct, own, and operate a fiber optic network for retail and wholesale telecommunication purposes.

On May 26, 1998, the Commission received an application by Comcast Telecommunications, Inc. d/b/a Comcast Long Distance for a Certificate of Authority to operate as a telecommunications company within the state of South Dakota. "Applicant seeks authority to offer a full range of "1+" interexchange telecommunications services on a resale basis. Specifically, Applicant seeks authority to provide MTS, out-WATS, debit card and calling card services. Applicant does not intend to provide operator services, 900 or 700 services."

TODAY, shall the Commission grant a Certificate Of Authority to Comcast Telecommunications, Inc.?

On June 4, 1998, Dakota Telecom, Inc. filed requesting that the Commission designate it as an Eligible Telecommunications Carrier, as that term is used in 47 USC 214(e)(1), for the following South Dakota exchanges: Centerville (552) and Viborg (766). Fort Randall Telephone Company is currently designated as an Eligible Telecommunications Carrier in the Centerville and Viborg exchanges. Interventions have been received from Fort Randall Telephone Company and SDITC.

TODAY, shall the Commission grant intervention to Fort Randall and SDITC? Also, shall the Commission direct the Executive Director to set a procedural schedule?

On June 16, 1998, the South Dakota Independent Telephone Coalition filed, on behalf of Fort Randall Telephone Company and CommNet Cellular, Inc., for approval by the Commission the negotiated Reciprocal Transport and Termination Agreement between Fort Randall Telephone Company and CommNet Cellular, Inc.

On June 16, 1998, the South Dakota Independent Telephone Coalition filed, on behalf of Jefferson Telephone Company and CommNet Cellular, Inc., for approval by the Commission the negotiated Reciprocal Transport and Termination Agreement between Jefferson Telephone Company and CommNet Cellular, Inc.

On June 16, 1998, the South Dakota Independent Telephone Coalition filed, on behalf of Tri-County Telecom, Inc. and CommNet Cellular, Inc., for approval by the Commission the negotiated Reciprocal Transport and Termination Agreement between Tri- County Telecom, Inc. and CommNet Cellular, Inc.

On June 22, 1998, HJN Telecom, Inc. applied for a Certificate of Authority to operate as a telecommunications company within the state of South Dakota. "Applicant is a reseller which intends to offer 1+ direct dialing, 800 toll free, and travel card service through the resale of telephone services provided by facilities-based interexchange carriers."

TODAY, shall the Commission grant a Certificate of Authority to HJN Telecom, Inc.?

On June 9, 1998, Susan Schamber, Freeman, SD, filed a complaint against Dakota Telecommunications Group (DTG) regarding internet services. "We have been internet customers of DTG since Feb.11, 1998. We had very good service until the end of March. At that time our internet began cutting out on us approximately every 2 minutes. DTG has record of how long our connection times were. We have made numerous calls to both DTG and our phone company, Golden West, trying to find out what the problem is and getting it resolved....Golden West tells me DTG has new modems and these modems can't keep up with the demand and DTG says they've had the modems since November with no problems until this time." What do you think the Commission should do to solve this problem? "We would like to know who is disconnecting our internet. We aren't getting straight answers. DTG should also quit advertising the $14.95 unlimited rate if they can't give that service. I also want our bill credited since we are not receiving adequate service."

TODAY, does the Commission find probable cause of an unlawful or unreasonable act, rate, practice or omission to go forward with this complaint and serve it upon the Respondent?

On June 29, 1998, Don and Jenny Malsom, Mina, SD, filed a complaint against U S WEST Communications, Inc. regarding updating lines. The problem with the telephone line goes "back at least 10" years. The sheriff's office receives 911 calls from their location when none were dialed, noise on the line is reported to U S WEST and when the repairman checks the line it is okay, Caller ID does not work, and calls can not "get thru to us." What do you think the Commission should do to solve this problem? "We are told we need new telephone lines - our equipment is too outdated - we request modern equipment like all others are on."

TODAY, does the Commission find probable cause of an unlawful or unreasonable act, rate, practice or omission to go forward with this complaint and serve it upon the Respondent?

On July 6, 1998, Tel-Save, Inc., filed a complaint against U S WEST Communications, Inc., regarding Violation of Sections 201(b) and 202 of the Communications Act of 1934, as amended, and Violation of S.D. Codified Laws Section 49-31-11. Tel-Save requests that the Commission order U S WEST to cease and desist from imposing unreasonable requirements on lifting of customer PIC freezes, requiring that U S WEST accept e-mailed requests to lift PIC freezes, both directly from end-user customers and as forwarded by TSI; and providing such other and further relief as the Commission deems necessary and appropriate.

TODAY, does the Commission find probable cause of an unlawful or unreasonable act, rate, practice or omission to go forward with this complaint and serve it upon the Respondent?

On July 7, 1998, Paul Malsom, Mina, SD, filed a complaint against U S WEST Communications, Inc. regarding updating lines. "My complaint is toward U S WEST Communications. I am no longer a customer of U S WEST. My telephone service is with McLeodUSA. The problem is McLeodUSA just rents the telephone line from U S WEST. U S WEST does all of the repairs and service work on the lines and switch boards. My problems have been occurring for approximately ten years. My phone is out of service quite often. I lose my service almost once a month. Moisture seems to be the biggest problem. When the phone is out, it usually is two days before service is restored. Recently my phone will ring once, then stop. When you pick up the phone, nobody is there. This occurs sometimes often during the day or night. My phone almost always has some static in the background. I am an internet customer also. When the static is high, I cannot connect. Also the static disconnects me quite often. As a farmer, the internet is very important to my business. I use the internet to keep track of markets and weather conditions. I am also concerned about what would happen in case of a farm accident or an emergency. We live 25 miles from the nearest hospital. If our phone is out, we have no way to contact emergency help. Usually when our phone is out, the neighbors' is also out of service. From what I understand, my phone system is outdated. The lines' insulation is also brittle and weathered. The system that I have is not capable of caller ID. I feel if other customers in our area can get that option, I should also be able to." The complainant requested the following relief: "I think U S WEST should update our phone system. Whatever it takes to solve our phone problems and make it more reliable. Possibly new lines and new switching systems. We are still on an old party line type system."

TODAY, does the Commission find probable cause of an unlawful or unreasonable act, rate, practice or omission to go forward with this complaint and serve it upon the Respondent?

On July 10, 1998, Dale and Linda Brooks, Mina, SD, filed a complaint against U S WEST Communications, Inc. regarding updating lines. "Lack of and poor telephone service in the Mina, South Dakota area." The complainants request the following relief: "The P.U.C. should get on U S WEST and not allow any rate increases until we have the same services that are available to residents of Aberdeen."

TODAY, does the Commission find probable cause of an unlawful or unreasonable act, rate, practice or omission to go forward with this complaint and serve it upon the Respondent?

On July 8, 1998, Denise Broveak, Nemo, SD, filed a complaint against U S WEST Communications, Inc. regarding additional lines. "I am writing this as President of the Elk Ridge Home Owners Association. Our subdivision consists of 56 lots and in 1993 the U S WEST engineer for our area noted that there were only 20+ pairs (cable) available to our development. The engineer was told that the lots were selling quickly and something needed to be done to correct the shortage....The tragedy is as follows: James Van't Land and his family have moved to Elk Ridge - June 22nd....Early April of this year, they were issued 3 phone numbers for 3 lines to be installed upon arrival 6/22/98. As of today, they have no service (July 8) and were issued 1 cell phone on July 3rd to carry them over. James' business line is not active and he is struggling with his job as a result. They receive no help from U S WEST." The complainant requests the following relief: "U S WEST has known for several years of this problem and have done nothing to prepare. Now, the Van't Lands are suffering from their lack of telephone access. Another family will soon be moving here (also needing a business line) and they are out of luck also. We need a multiplexer or more cable! Van't Lands deserve compensation or credit for inconvenience!"

TODAY, does the Commission find probable cause of an unlawful or unreasonable act, rate, practice or omission to go forward with this complaint and serve it upon the Respondent?

On July 15, 1998, Marian C. Brooks, Mina, SD, filed a complaint against U S WEST Communications, Inc. regarding updating lines. "We have had phone problems for years" in the Mina, South Dakota area. The complainant requests the following relief: "You know the answer to that better than I do."

TODAY, does the Commission find probable cause of an unlawful or unreasonable act, rate, practice or omission to go forward with this complaint and serve it upon the Respondent?